Tengiz is located on the 2,500 square kilometer (1,600 square mile) project license area which includes the

super
giant Tengiz field, and a smaller but sizable Korolev field and several exploratory prospects.

The Tengiz and Korolev fields have potential for an estimated 750 million to 1.1 billion metric tonnes (6 billion to 9
billion barrels) of recoverable oil. Estimated original oil in place in the drilled and undrilled portions of Tengiz field is
about 3 billion metric tonnes (26 billion barrels). At a world class size of 190 million metric tonnes (1.5 billion barrels),
Korolev is onesixth the size of Tengiz.

Tengiz field is one of the world's deepest developed super giant oil fields, with the top of the reservoir at about 4,000
meters (13,000 feet). Tengiz reservoir is 19 kilometers (12 miles) wide by 21 kilometers (13 miles) long. The oil
column measures an incredible one mile thick. The reservoir area is so large that one would have to run nearly two
marathons to cover the entire distance around it.

TengizChevroil (TCO) is a multibillion dollar 40 year long project that started in 1993 as a result of an
agreement between the then-two year-old Kazakhstani government and the Chevron executives.
The contracts between Chevron and Kazakhstan are not publicly available and that creates
complications in accessing data about plans, payments, royalties, and any other crucial information
[1]. Ever since the projects conception, numerous ecological, health and labour-related problems
have persisted. To start with the pollution of atmosphere, from 30 atmosphere control stations built in
1988, only 14 are left since TCOs take-over of the exploration of Tengiz [2]. To date TCO has paid
the fines of more than 7$ million based on the post-factum data collected from TCOs computers,
especially for storing excessive amounts of sulfur (a byproduct of crude oil production) in 2006 [1]
and then in 2009, and for flaring excessive amounts of gas during the entire year of 2010 [3]. Gas
flaring is illegal in the country, and TCO has been simply paying fines without changing its practices
in this respect. However, according to the director of the Science Centre for Ecological Problems of
Atirau Region of the Atirau Oil and Gas Institute, Dr. Muftah Diarov, since 2002 all the fines have
been fed into the federal government, where no one in the region benefits from them. He has made
numerous appeals to the government to create locally based funds, but has been met with rejection
[4]. Another significant factor is the deteriorating health of local residents, TCO workers, and conflicts
in the workplace. According to NGO Kaspiy Tabigati Director Makhambet Khakimov, in the 90s 64
workers were reported to have died on the workplace, and after 2000 the data and statistics were
not publicly accessible anymore [2]. Starting in 2001, multiple labour conflicts have been reported.
With the peak occurring in 2006, when a massive fight occurred between Kazakhs and Turks
working on TCO, with 339 Turkish citizens injured. The reasons, as for many other earlier and later
conflicts, have been named as wage discrimination against Kazakhs, disrespect by Turkish workers,
unlawful firings and work conditions [5]. As for the health of local residents, in the early 2000s the-
then governor of Atirau Oblast I. Tasmagambetov ordered a medical examination of people of three
villages located in the immediate proximity to the oilfield: citizens of all ages were found to be in poor
health 1,2-2,0 times more than in the control region, womens reproductive abilities were
compromised, and the number of children born with abnormalities was 4,3 times higher than in the
control region [6]. In 2004, TCO was forced to pay 76$ million to relocate the village of Sarykamys,
since the area was recognized as unlivable [6]. NGO Crude Accountability claims to have followed
up on the relocation and have found that many villagers did not get their promises met [7]. At
present, TCO is moving forward on the expansion to build a new III generation plant and a sea
channel to transfer cargo and oil to the Aktau seaport and back [8]. Dr. Diarov in addition to his
'scientific activism' has published a detailed report that specifies that if the seaport is built,
tremendous destruction will be caused to the ecosystem of the region that is already suffering from
massive pollution (4,360g of emissions for each tonne extracted, where the norm is no higher that
2200g) [8]. At the publicly held consultation, NGO activists and Dr. M. Diarov have expressed their
full discontent and disapproval, voicing their grave concerns for the environment, stating corruption
in employment of unqualified people for TCO jobs, and expressing desperation with local
government's compliance with the will of TCO executives [11]. In April 2015, due to the fact that
compressors on the torch 0130 stopped working there was an illegal burning of sour gas (natural
gas containing significant amounts of hydrogen sulfide) that polluted the surrounding environment. In
December 2015, the Special Interregional Economic Court of Atirau Oblast ordered TCO pay the
sum of 124 614 855 KZT (approx. 342 000 USD with conversion rate of 1 USD=365 KZT) to the
Kazakhstan government for the damages done to the environment, effective immediately [12]. In
addition, in April 2015 this Kazakhstans leading oil producer slowed its previously announced
expansion plans in response to lower oil prices. Originally, the expansion had been planned to be
over by 2019. Now with the weak price of oil, the plan might be delayed by two or more years [13].
That represents a slight gain for environmentalists, who had expressed grave concerns about the
expansion of the project. [9]. In October 2015, the last ton of open-air stored sulfur was sent for
treatment at the nearby processing facility. Tim Miller, general director of the company, stated that
from now on TCO would only produce the amounts of sulfur it can send to consumer. However,
environmentalists do not share the optimism of the company. According to M. Diarov due to the fact
that sulfur was stored in the open air for years, the wind blew out thousands of tons of the element
and it gradually got soaked up by the soil. As a result, all soil within a 70km radius is barren.

Fluor: Engineering, procurement and construction management (EPCM) services for

the restarted Second Generation and Sour Gas Injection (SGP/SGI) Projects
Punj Lloyd: Offsite and utilities mechanical work comprising equipment installation,
piping fabrication, erection, insulation, painting, commissioning assistance for the
following areas at Tengiz, Kazakhstan : Chemical Storage, Fuel Gas Compressor,
Flare, Interconnecting Piperacks, LPG and Crude Storage Tanks, LACT (Lease
Automatic Custody Transfer) Metre Water Treatment
Kentz: Structural, mechanical and piping (SMP) construction services, pipelines
repair and construction services, and its expertise in electrical and instrumentation
(E&I) construction
Giprogazoochistka:
o Sulfur removal facility, sulfur recovery and tail gas treating, I stage.
o Sulfur removal facility, sulfur recovery and Tail Gas Clean-up II stage
o Additional tail gas clean-up unit, II stage
o Gas sweetening plant and sulfur recovery, I stage. Facility complex on gas
sweetening, sulfur removal facility and sulfur recovery

Development of Tengiz Oil Field

ENKA and Bechtel have carried out an extensive range of engineering, procurement and
construction services in the western region of the Republic of Kazakhstan since 1993. Their joint
subsidiary, Senimdi Kurylys LLP, is a local limited liability partnership and apart from the
ongoing operations and maintenance contract, most recent large-scale projects by Senimdi
Kurylys LLP include the Second Generation and the Sour Gas Injection Project, collectively
referred to as the SGP/SGI. These have increased Tengiz Oil Field production from 13 million to
25 million tonnes of oil per year.

The Second Generation Project (SGP):

The Second Generation Project (SGP) was the main component of Tengizchevroils
Asset Development Project, one of the largest and most complex projects undertaken in the oil &
gas industry, to expand the crude oil production capacity of the Tengiz field by approximately 12
million metric tons per year and significantly increase the production of associated dry gas,
propane, butane, and saleable sulfur products.

The Second Generation Project (SGP) added 39 new producing wells and upgraded crude oil
production and export infrastructure at Tengiz. Major new surface facilities included a field
production gathering system, crude stabilization and gas processing plants, a new product export
infrastructure (gas export pipeline, additional crude storage, and LPG storage), and a sulfur
forming plant (to convert sour gas reserves to usable sulfur products for export such as elemental
sulfur pellets or sulfuric acid).

Project Description

SGP Second Generation

Procurement
Construction

Project Features
Contract Type

Lump Sum and Unit Rates

Scope of Work

Contractor

Client

Key Quantities

Project Duration
Location

UNIQUE CHALLENGES

Remote location and hostile climatic conditions with temperatures ranging from +40 Celsius in
summer to below -40 Celsius in winter created unique challenges for the projects multi-national
workforce. ENKA utilized construction best practices, its vast winterization experience, and
extensive planning to address the challenges. Aggressive local content targets, high personnel
peaks (up to 7,000) due to challenging schedule objectives and back-to-back working regime that
is dictated by law were managed through a substantial craft training program. The brown field
features of the area was carefully addressed by implementing a robust HSE program resulted
with minimum disruption due to simultaneous operations.

ENKA SCOPE OF SERVICES

SIGNIFICANT FEATURES AND ACCOMPLISHMENT

Second Generation Project Crude Stabilization and Gas Processing Multi-discipline Package

The crude stabilization unit included facilities for inlet separation, crude desalting, crude
stabilization, gas compression, and condensate stabilization. The gas processing unit included
facilities for management of high-pressure sour gas, upstream removal of condensed liquids, and
removal of the saturated outlet vapor stream plus a molecular sieve unit for removal of water.

Second Generation Project Power Generation and On-plot Utilities Multi-discipline Package

Major facilities in the power generation area included a gas turbine hall with two GE Frame 9E
gas turbine generators, each with a nominal rating of 123 MW, including all associated electrical,
control and instrumentation equipment, and two supplementary-fired Heat Recovery Steam
Generators (HRSGs) each capable of generating a maximum of 450 tons per hour of steam at
370 C and a pressure of 72 bar, using gas turbine exhaust gas and full supplementary firing, an
electric switchyard, a combined substation and control building, and associated pipe racks. The
control building contained the control room for the entire SGP facility while the substation
contained the main power distribution equipment for the entire SGP facility.

ENKA also performed the site preparation and early civil works, and construction of site
temporary facilities works under separate early works contracts prior to the main SGP
construction contract awards.
The Sour Gas Injection Project (SGI):
The Sour Gas Injection (SGI) Project was one of the two main components of Tengizchevroils
Asset Development Project, a world-scale US$ 6.9 Billion program to expand the crude oil
production capacity of the Tengiz field by approximately 12 million metric tons per year and
significantly increase the production of associated dry gas, propane, butane, and saleable sulfur
products.

The SGI Project utilized state-of-the-art gas injection technology to enhance oil recovery and
maintain reservoir pressure by reinjecting produced sour gas back into the reservoir. Major new
facilities included a sour gas injection plant and eight injection wells with associated equipment
and facilities.

The SGI project was divided into two stages: Stage 1; was performed to inject sweet gas from
the processing facilities into the reservoir to prove the operation of the compressor and validate
the predicted response of the reservoir. Stage 2; expanded the installation, permitting injection of
high pressure sour gas (17% H2S) from SGP and providing the opportunity to process an
additional 3 million tonnes of oil within the oil/gas separation area of SGP. The SGI project
established a compressor and associated piping systems capable of delivering sour gas into the
7,000 m deep reservoir at 10,000 PSI in a way that is both safe and dependable.

Project Description

The Sour Gas Injection (SGI)

Procurement
Construction

Project Features
Contract Type

Lump Sum and Unit Rates

Scope of Work

Contractor

Client

Key Quantities

Project Duration

Installed a compressor and associated piping systems capable of delivering sour gas (17% H2S)
into the reservoir at 10,000 PSI.
UNIQUE CHALLENGES

Remote location and hostile climatic conditions with temperatures ranging from +40 Celsius in
summer to below -40 Celsius in winter created unique challenges for the projects multi-national
workforce. ENKA utilized construction best practices, its vast winterization experience, and
extensive planning to address the challenges. Aggressive local content targets, challenging
schedule objectives and back-to-back working regime that is required by law were managed
through a substantial craft training program. High operation (10,000 psi / 690 bar) pressure
requirement to boost the H2S gas into 7000m reservoir dictated heavy wall (42~62 mm)
thicknesses for 10~14 inch diameter pipework. These spools were welded and installed with
special high technology automatic welding equipment. The installation and pre-commissioning
of the Injection Compressor required specialized expertise. ENKAs specialized operations team
had successfully implemented the pre-commissioning of the compressor in two stages as
explained above.

ENKA SCOPE OF SERVICES

SIGNIFICANT FEATURES AND ACCOMPLISHMENT

Train 5 Project
The Train 5 project entailed the construction of a process group with an annual capacity of 2,5
million tons. The project contributed to the increase in the crude oil production capacity to 12
million tons of sweet crude per year as forecast in Tengizchevroils 5-year business plan. The
project involved the engineering, supply of equipment and materials, and construction of the
processing unit for crude separation, desalting, condensate srtipping, H2S removal and NGL
recovery. The auxiliary units, built in addition to the main processing units, were a 240 MW
gas turbine generator station, a 110 KV switchyard power management system, a high-pressure
boiler plant, a nitrogen unit and a 100 t/hour water treatment plant.

Project Description

Train 5 KTL 2.3 Additions to Tengiz Oil Processing Facilities

Engineering
Procurement
Construction

Project Features
Scope of Work

Engineering, Procurement, Construction

Contracto
Client

Key Quantities

Project Duration

Tengiz Oilfield, Kazakhstan

The Tengiz oil fields entered a new phase of production with the construction of its Second

Generation Project (SGP) and the introduction of sour gas injection (SGI). This onshore

development, which has been in the planning and approval stage since 2002, began in 2004

and required a total investment of $7.4bn. The integrated project was completed in the second

half of 2008.

The Tengiz field, first discovered in 1979, has recoverable reserves estimated at between six

billion and nine billion barrels. The field was jointly developed in 1993 as a 40-year venture

between Chevron Texaco (50%), KazMunaiGaz (20%), US ExxonMobil (25%) and LUKArco

(5%). The joint venture company is known as TengizChevrOil (TCO). Chevron is the operator

of the TCO field.

Prior to its expansion in 2008, the Tengiz oilfield had 53 wells, tapping a column of crude oil

around 1.6km thick. When the field was first tapped its oil pressure was 12,000psi, but in 2004

the pressure came down to 10,000psi in most areas and 8,500psi in others. The SGI project

used gas injection technology to boost the pressure and increase oil recovery, while the SGP

increased the number of producers (wells) and improved and expanded the crude export

infrastructure.
 The Tengiz field's production of crude in 2004 was 13 million tonnes per year but the SGI and

SGP production increased this to over 25 million tonnes. TCO crude oil production capacity

was increased by about 80% to 540,000 barrels of crude oil, 46,000 barrels of natural gas

liquids and 760 million cubic feet of natural gas.

"Chevron is operator of the Tengiz field."

The two projects created over 7,000 jobs in Kazakhstan and aided the development of the

economy. A total investment of $20bn is envisaged for the duration of the 40 years of the

Tengiz oil field venture.

TengizChevrOil intends to export more of the Tengiz field's additional capacity via the Caspian

Pipeline Consortium pipeline running the 1,500km from Tengiz to the Russian Black Sea port

of Novorossiysk (thus solving the export problem from the remote Tengiz field).

Politics and controversy

The Tengiz expansion projects were almost completely shelved during a breakdown in

relations between TengizChevrOil and the Kazakhstani Government in 2002. The terms of the

expansion were initially part of the 1993 contract signed by all the concerned parties.

The Kazakhstan Government warned that the project could be cancelled in November 2002

following a disagreement about how to fund it. The private partners wanted to use the profits

from the oilfield to fund the SGI and SGP, which would have meant lower profits and hence

lower taxes due on the profits. The Kazakhstan Government, however, was against this and

wanted to maximise the profits in order to claim more money for the state.

Following this major disagreement, many of the drilling subcontractors, including Parker

Drilling Company of Houston, Texas, were ready to conclude their contracts and the field could
have closed. The issues were resolved during 2003 negotiations when an agreement about

funding of the new project was reached (90% foreign investment) and the tax situation clarified

(the Kazakhstan Government receives a $200m a year payment and profits and tax

percentages).

Tengiz environmental polluiton fines

TengizChevrOil were fined $71m for environmental transgressions imposed by the Tengiz

regional government (Atyrau Oblast) late in 2002. The Supreme Court, however, reduced the

fine to $7m on an appeal. This occurred because of changes in the way the central

government collects taxes. In previous years some of the taxes were paid directly to the

regional government where Tengiz is based.

The central government decided in 2002 / 03 that all taxes should first be paid to the capital,

Astana. Following this the Atyrau Oblast realised it faced a shortfall. It then had the idea of

suing TengizChevrOil for damaging the environment. The fine was imposed for sulphur

pollution.

The sulphur concerned was already in elemental form stored in blocks around the Tengiz field

and did not cause pollution. The sulphur blocks are now converted into pellets and sold on the

world market as a valuable commodity. A new plant was constructed to convert potentially

polluting sour gas (H2S) into sulphur pellets. In addition, the SGI system used up a significant

proportion of the sour gas produced (sour gas disposal is one of the SGI's secondary benefits).

Construction and infrastructure

The reservoir of the Tengiz field is 3,657m (12,000ft) deep, making it the deepest operating

oilfield project in the world.

"Tengiz contains 24 billion barrels of high quality oil and
nine billion barrels of recoverable oil."
The scope of the SGI / SGP projects included installation of the largest single-train oil and gas

separation facility. The field also has the largest single-train sulphur recovery unit and the first-

of-its-kind high-pressure, high H2S gas re-injection facility.

The SGP project involved construction of greenfield facilities such as crude oil export systems,

crude desalting, sulphur recovery, crude stabilisation, gas processing, sour gas dehydration

and LPG processing and storage facilities. A 435 mile railway line was also constructed along

with utilities and offsite constructions.

The SGI will inject sour gas into the reservoir at pressure of 10,000psi from the SGP to the

compressor. The project also increases the oil processing capacity of the SGP by about three

million tonnes. The projects required a workforce of 25,000 personnel at peak time

construction.

In December 2009 a four-year, $258m Gas Utilisation Project was completed at the field to

reduce the natural gas flaring by 95%. TCO also completed a major project replacing the crude

oil storage facilities in January 2010.

Fifth train

De-bottlenecking of the plant was taken up prior to 2004. A fifth train was installed as part of

the Second Generation Project in 2008. De-bottlenecking in past expansion led to the sulphur

plant capacity exceeding requirements because H2S levels have in practice been not only

lower than expected, but also lower than the plant was designed to handle. It was decided that

there was sufficient margin to handle existing sour gas flows and the flow from a new train.
The new fifth train has utilities, a plant-wide control room and a gas-processing plant that can

handle excess gas from KTL 1 and 2 as well as the new train.

Contractors and infrastructure

The lead contractor for the engineering, procurement, construction, management (EPCM) of

the SGP and SGI are PFD UK, a joint venture between Parsons Energy & Chemicals and Fluor

Daniel Corporation. The terms of the agreed contract under government rules require that the

lead contractors use at least 80% Kazakhstani labour during the project.

Able Instruments and Controls provided the flow and level measurement instrumentation

systems for the project. Heavy construction equipment were provided by Arctic Construction

International (ACI) who also provided trained personnel to operate and maintain the equipment

over the duration of the contract.

Versatec Engineering provided engineering consultancy and safety consultancy throughout the

duration of the project. Honeywell provided the automation for the project. The $92m crude oil

storage tank replacement project was completed by Kazakhstani companies

NeftesStroService, Byelkamit and Kazcomservice.

All of the contractors were aware of the conditions in Tengiz, where the temperatures can vary

from 36C to -40C.

Parson Fluor Daniel joint venture

PFD UK held the majority of subcontracts and purchase orders for the project and was be

responsible for the construction of major new infrastructure at the oil field including: a 6,500-

bed construction camp, a new rail line spur, a new road between the construction camp and

the SGP construction site.

"PFD UK held the majority of subcontracts for the
Tengiz project."
The major new facilities included a new field production gathering system and SGP process

plant, oil refinery expansion, an SGI compressor plant, and new product export infrastructure

(gas export pipe-line, additional crude storage, LPG storage) and a sulphur forming plant (to

convert sour gas reserves to usable sulphur products for export such as elemental sulphur

pellets or sulphuric acid).

The main part of the project was eight injectors for the SGI project and 39 new drilling wells as

the second generation project. Trial injections for the SGI system began in the third quarter of

2004 and continued for up to 18 months before the full scale injection system was

implemented (the compressor plant was completed by then).

Able Instruments and Controls

This supplier provided and installed gas and liquid clamp-on ultrasonic flow meters

(maintenance free), nuclear level instrumentation, and radar and guided wave radar (GWR)

level transmitters. A total of 135 radar and GWR instruments were required, but there was an

option for RF admittance level transmitters for applications that were not suitable for radar or

GWR.

The radar installations were installed under a two-wire, loop powered, intrinsically safe basis

and used in oil, gas and sulphur recovery areas and also in underground facilities (liquefied

gas storage). Wide beam ultrasound transmission is used to allow operation under wet

conditions and the required accuracy over a wide range of flow rates.

Varied nucleonic level gauging for the project requires interface control on separator vessels

and foam detection on flash drums. Able supplied their state-of-the-art gauging technology
 along with a team of flow meter and instrumentation engineers to make the system run

smoothly.

Share

Tengizchevroil operates most innovative processes and reliable facilities to

produce crude oil, liquefied petroleum gas, dry gas and sulfur of highest quality.

KTL & Second Generation Plant

Tengizchevroil inherited an oil and gas separation plant when it took over operations at Tengiz in 1993. This first
generation of the Tengiz plant is called the KTLs (Russian for Complex Technology Lines). TCO has invested in
expanding and improving the KTLs over the life of the operation. Today, the KTLs consist of five oil and gas
processing trains and are now significantly more efficient and environmentally friendly. In 2009, TCO eliminated
routine flaring at KTL Plant.

Tengizchevroil's production capacity has risen with the commissioning of its latest expansion project - Second
Generation Expansion - which included the Second Generation Plant (SGP) and Sour Gas Injection (SGI) facilities.

This expansion doubled the Tengiz production capacity and will help Kazakhstan meet its goals of significantly
increasing production. TCO completed the expansion in the third quarter of 2008 which brought daily capacity to
75,000 metric tonnes (600,000 barrels) of crude oil and 22 million cubic meters (750 million standard cubic feet) of
gas.

This expansion was also a huge Kazakhstani Content success. We worked hard to ensure that Kazakhstani
companies played a significant role in the realization of the projects. TCO spent a total of $2 billion in Kazakhstani
content for the expansion.

Second Generation Plant's full facilities now stabilize and sweeten crude oil, as well as separate and process natural
gas into gas products and elemental sulfur. The Second Generation Plant is the largest single sour crude processing
train in the world. Not only have we increased production, but the expansion has helped to increase environmental
protection and maximize energy efficiency through the use of advanced technology.
Sour Gas Injection

SGI re-injects one third of produced sour gas back into the Tengiz reservoir at very high pressures to help preserve
reservoir pressure. The injection compressor is like no other compressor in the world and represents the state of the
art in sour gas injection technology.
Use of Innovation
Tengizchevroil took the opportunity to add several environmental innovations into the design of its expansion to
minimize operational impacts on the environment and improve energy efficiency.

Compared to the existing facilities, Second Generation Plant uses half the energy of the previous technology to
process a unit of oil; cutting emissions in half and freeing up fuel gas for export and domestic use. TCO is using low
emissions and high energy efficiency technology and some of the largest steam generators in the world to provide
enough power for the huge facility.

A key driver in the environmental design of the Tengiz expansion project was to conserve, recycle and reduce water
usage.Tengizchevroil has reduced consumption of water per tonne of oil produced from 1.3 cubic meters in 1994 to
0.2 cubic meters today. With stateoftheart technology our operations produce our own technical water for
processing, steam generation, utility water and fire fighting.

One way to obtain demineralized water is the separation of water from oil-containing fluids which include oil, gas, salt,
water and hydrogen sulfide. First, the crude is stripped of hydrogen sulfide in the stabilizer and sent for transport. The
sour gas is treated to make sales gas, propane, butane and sulfur. In the process of steaming acid and salty water is
cleaned from hydrogen sulfide and then this stripped water is sent to the evaporator, then the evaporator vaporizes
the salty water and produces distillate. Next distillate is served to water treatment plant, and then returned to the
system as demineralized water for manufacturing processes and production of steam. Water restoring coefficient on
evaporator exceeds 96 percent.

Water is also produced as a natural part of the sulfur recovery process when hydrogen sulfide is converted into
elemental sulfur. Additionally, the SGP open drain system collects run off water, rainwater and melting snow across
the facility. This water is treated to remove solids and organic contamination and is also used as technical water. This
water is treated to remove solids and organic contaminations and all that comes to water treatment plant to get
demineralized water.

Parker Drilling set to send drilling rig to Tengiz

in August
Jun 06, 2000 02:00 AM
Tulsa-based Parker Drilling announced that it had finished modifying its Rig 249, which will be
used at the Tengiz oil field in Kazakhstan.
The rig will depart from the port of Houston in August for shipment by sea to St. Petersburg,
Parker said. From St. Petersburg, it will be shipped by rail to western Kazakhstan.
The US company had previously been operating the rig in Colombia but sent it to the Partech
manufacturing facility in New Iberia, Louisiana, for modification. At Partech, all of the rig's main
components and systems were refurbished or replaced. The rig was also winterised so that it
could operate all year in Kazakhstan under harsh climatic conditions.
Parker began providing drilling services to TengizChevroil (TCO), the US-Russian-Kazakhstani
joint venture that is operating the Tengiz field, in 1993. Rig 249 will be the second drilling rig it
has operated in Kazakhstan, and Parker plans to send a third rig (one not yet built) to Tengiz
next January. It will begin work on that rig at Partech in July of this year.
The first rig Parker sent to Kazakhstan, Rig 257, is now being used by the Offshore Kazakhstan
International Operating Company (OKIOC) at the Vostochny Kashagan field on the Caspian Sea
shelf.

Parker rig to drill in giant Tengiz field

08/21/2000

Click here to enlarge image

Parker Drilling Co., Tulsa, has completed the modification of its Rig 249, which will begin
drilling in giant Tengiz oil field in western Kazakhstan for Tengizchevroil (TCO) in August.
The rig is under a long-term contract to TCO, a limited liability partnership that includes
Chevron Corp., ExxonMobil Corp., KazakhOil, and Lukoil.
Rig 249, an E-3000 drilling rig with a depth rating of 30,000 ft, was upgraded and modified
at Parker's manufacturing facility, Partech, in New Iberia, La. All major rig components and
systems, including the drawworks, mud system, mud pumps and power package, were
either replaced or refurbished.
Prior to the upgrade, the rig had been operating in Colombia. Rig 249 is the second Parker-
owned rig operating as part of AralParker, a joint venture of Parker and a local Kazakh
company that promotes future expansion in the country.
Parker first entered into an agreement with Tengizchevroil in 1993 to provide base
management, logistics support services, and contract labor for two rigs owned by TCO. The
contract was extended on a long-term basis in 1997, and a Parker rig was added to the
services.

The Soviet Union reports the first well in giant Tengiz oil field near the northeast coast of the
Caspian Sea in Kazakhstan is on production.
The Moscow newspaper Trud said oil is flowing from No. 8 well. It did not disclose the
volume.
Trud said Tengiz production can rise to 700,000 b/d "in the very near future," but said
nothing about progress on drilling and completion of other wells.
Trud disclosed that 2.5 billion rubles were spent in Tengiz field before the first oil was
produced from No. 8 well. It quoted the head of the "expert equipment installation workers"
of Canada's Lavalin firm as giving "high praise" to specialists or the "Tengizneftegaz"
production association for completing the well.
"I never before saw such a technically coordinated job of putting a highly complex and
unique well on production," a Lavalin representative told Trud. Trud noted that Tengiz was
placed on production at a very opportune time--"when the strain on our nation's fuel/energy
complex had reached its limit." If, as the newspaper claimed, Tengiz production can be
hiked to 700,000 b/d "in the very near future," the field could be instrumental in halting the
plunge in overall Soviet crude/condensate flow during the past 3 years.
The U.S.S.R.'s oil production fell from more than 12.5 million b/d in first half 1988 to about
10.65 million b/d early this spring. During the late 1980s, Soviet officials predicted Tengiz oil
flow would reach 240,000 b/d by the end of 1990 and possibly peak at close to 1 million b/d.
Trud also said U.S. interests are prepared to invest "about $10 billion" in Tengiz
development. It said a protocol has been signed regarding plans to include Tengiz field as
part of the joint venture "SovChevroil" in Kazakhstan's Guryev Province.
Chevron Overseas Petroleum Inc. and the Soviet government are partners in SovChevroil.
With the movement toward autonomy by most of the U.S.S.R.'s 15 union republics,
Kazakhstan is likely to obtain from Moscow an increasing role in SovChevroil operations
and future joint ventures with foreign firms.
RESERVES, CHARACTERISTICS
"Commercial" reserves in Tengiz field were placed at 1 billion metric tons (7.3 billion bbl) in
the Trud report. Potential Tengiz reserves in place were earlier estimated by some Soviet
authorities at more than 25 billion bbl (OGJ, June 11, 1990, p. 18).
Based on incomplete data, other Soviet sources said the field is believed to contain as
much as 35-40 billion bbl of oil and 46 tcf of gas in place. At 25 billion bbl of oil in place,
recoverable reserves could be 10-11 billion bbl, considerably higher than the figure cited by
Trud.
The Moscow daily conceded that the Tengiz complex in a barren desert area with an
extremely harsh climate, is "a tough nut" and is still plagued by many problems.
"This is true with respect to the construction and operational phases of the (Tengiz) project,"
Trud said. "Cooperation with Chevron Overseas must provide a great deal of assistance
here."
L. Churilov, first deputy minister of the U.S.S.R.'s Oil and Gas Ministry, was quoted by Trud
as saying, "The world's best and most modern technology is being employed in Tengiz field.
It provides safety not only for personnel but for the environment.
"Attention is given to the smallest leak. The system has been designed to immediately shut
down a faulty well, pipeline, or installation."
Trud emphasized the very high reservoir pressure in Tengiz--as much as 900 atm (13,221
psi).
"Then there is the problem of the great depths at which the pay is found," the article said.
One Tengiz well Went to 17,759 ft but did not reach the bottom of the Carboniferous
reservoir. Last year, No. 54 well in the salt dome sector of Tengiz was in the planning stage
and projected to 22,966 ft.
"Moreover," Trud declared, "we encountered extremely high temperatures in Tengiz. And
the main thing is the large hydrogen sulfide content in the dissolved gas, which is
dangerous for all living things."
Soviet reports place the hydrogen sulfide content of Tengiz gas at as much as 17.7%.
Methane is as high as 70%, ethane up to 10.5%, propane as much as 7.5%, carbon dioxide
as high as 2.2%, and nitrogen a maximum of 1.4%.
A recently published Soviet geological handbook says Tengiz oil is about 44 gravity, and the
gas:oil ratio is 603 cu m/metric ton of crude. Sulfur content is up to 0.5% and paraffin 2.2%.
Tengiz exploration began in 1978, and oil was found in 1979. The structure is reef massif.
 TULSA, Okla., Oct. 19 /PRNewswire/ -- Parker Drilling (NYSE: PKD) Rig 249
began drilling operations at the Tengiz field in Kazakhstan, on October 14,
2000, pursuant to a long-term contract with Tengizchevroil (TCO), a limited
liability partnership that includes Chevron, ExxonMobil, KazakhOil, and
LUKARCO. Drilling operations will focus on production drilling at average
depths of 15,000 feet, although there will be some exploration and re-entry
work.
Parker Drilling Rig 249 is an E-3000 drilling rig with depth capabilities
in excess of 30,000 feet. The rig's innovative design includes cylindrical
mud tanks, a state-of-the-art moving system for fast well-to-well moves and
rigging up and a winterized design for operating in arctic conditions. The
substantial rebuilding of Rig 249 for this project was completed in July at
Partech, the Parker Drilling manufacturing facility located in New Iberia,
Louisiana. The 60-day rig move included transportation via ship to
St. Petersburg, train to Tengiz, and truck to the first field location.

Kazakhstan Land Rig Activity Summary

-- New-build Rig 258 is nearing completion at Partech. The rig will

begin mobilization in November for the Tengiz field for TCO with
operations commencing in the first quarter of 2001. Rigs 249 and 258
will join Rig 107 currently providing workover and completion
operations for TCO. Parker Drilling also manages and operates two
TCO-owned rigs in the Tengiz field.
-- Rig 259, contracted to work for Karachaganak Petroleum Operating BV
(KPO), is completing modifications in Houston and is scheduled for
delivery to the Karachaganak field in Kazakhstan during the first
quarter of 2001. Rig 259 is one of the three rigs Parker Drilling
will contribute to the SaiPar joint venture involving six rigs for the
KPO contract.
-- Rig 230 will be the first rig to begin work for the KPO contract. The
rig is currently moving to the Karachaganak field for a December
start-up.
 -- Rig 216 will be the final rig to begin work in the KPO contract and is
scheduled to start in late 2001.
-- Rig 102 has mobilized for a major operator to start workover
operations in late October in western Kazakhstan.
-- Rig 236 completed the well for JNOC in early October and will move to
the Khariaga field in Russia to start a multi-well contract for Total.

Caspian Sea Offshore Rig Activity Summary

-- Parker Drilling Rig 257, working in the Caspian Sea for the Offshore
Kazakhstan International Operating Company NV (OKIOC), has moved to
its second location in the West Kashagan block. The rig spud the
Kashagan West well on October 7 and should finish by mid 2001. The
first well drilled by Rig 257, the Kashagan East well, has been
referred to by ExxonMobil as "a world class discovery." The second
well is an attempt to further define the oil and gas bearing
structure.

Parker Drilling Company is a Tulsa-based global energy company

specializing in offshore drilling and workover services in the Gulf of Mexico
and international land and offshore drilling. Parker also operates Quail
Tools, a provider of premium rental tools for oil and gas drilling. Parker
Drilling has 80 marketable rigs and employs more than 3,300 people worldwide.
For more information go to www.parkerdrilling.com.

This release contains certain statements that may be deemed to be "forward-

looking statements" within the meaning of the Securities Acts. All
statements, other than statements of historical facts, that address
activities, events or developments that the Company expects, projects,
believes or anticipates will or may occur in the future, the outlook for rig
utilization and dayrates, general industry conditions including future
operating results of the Company's are forward-looking statements. Although
the Company believes that its expectations stated in this release are based on
 reasonable assumptions, actual results may differ from those projected in the
forward-looking statements. For a more detailed discussion of risk factors,
please refer to the Company's reports filed with the SEC, and in particular,
the report on Form 10-K for the year ended December 31, 1999.

SOURCE Parker Drilling Company

TULSA, Okla., Oct. 19 /PRNewswire/ -- Parker Drilling (NYSE: PKD) Rig 249
began drilling operations at the Tengiz field in Kazakhstan, on October 14,
2000, pursuant to a long-term contract with Tengizchevroil (TCO), a limited
liability partnership that includes Chevron, ExxonMobil, KazakhOil, and
LUKARCO. Drilling operations will focus on production drilling at average
depths of 15,000 feet, although there will be some exploration and re-entry
work.
Parker Drilling Rig 249 is an E-3000 drilling rig with depth capabilities
in excess of 30,000 feet. The rig's innovative design includes cylindrical
mud tanks, a state-of-the-art moving system for fast well-to-well moves and
rigging up and a winterized design for operating in arctic conditions. The
substantial rebuilding of Rig 249 for this project was completed in July at
Partech, the Parker Drilling manufacturing facility located in New Iberia,
Louisiana. The 60-day rig move included transportation via ship to
St. Petersburg, train to Tengiz, and truck to the first field location.

Kazakhstan Land Rig Activity Summary

-- New-build Rig 258 is nearing completion at Partech. The rig will

begin mobilization in November for the Tengiz field for TCO with
operations commencing in the first quarter of 2001. Rigs 249 and 258
will join Rig 107 currently providing workover and completion
operations for TCO. Parker Drilling also manages and operates two
TCO-owned rigs in the Tengiz field.
-- Rig 259, contracted to work for Karachaganak Petroleum Operating BV
 (KPO), is completing modifications in Houston and is scheduled for
delivery to the Karachaganak field in Kazakhstan during the first
quarter of 2001. Rig 259 is one of the three rigs Parker Drilling
will contribute to the SaiPar joint venture involving six rigs for the
KPO contract.
-- Rig 230 will be the first rig to begin work for the KPO contract. The
rig is currently moving to the Karachaganak field for a December
start-up.
-- Rig 216 will be the final rig to begin work in the KPO contract and is
scheduled to start in late 2001.
-- Rig 102 has mobilized for a major operator to start workover
operations in late October in western Kazakhstan.
-- Rig 236 completed the well for JNOC in early October and will move to
the Khariaga field in Russia to start a multi-well contract for Total.

Caspian Sea Offshore Rig Activity Summary

-- Parker Drilling Rig 257, working in the Caspian Sea for the Offshore
Kazakhstan International Operating Company NV (OKIOC), has moved to
its second location in the West Kashagan block. The rig spud the
Kashagan West well on October 7 and should finish by mid 2001. The
first well drilled by Rig 257, the Kashagan East well, has been
referred to by ExxonMobil as "a world class discovery." The second
well is an attempt to further define the oil and gas bearing
structure.

Parker Drilling Company is a Tulsa-based global energy company

specializing in offshore drilling and workover services in the Gulf of Mexico
and international land and offshore drilling. Parker also operates Quail
Tools, a provider of premium rental tools for oil and gas drilling. Parker
Drilling has 80 marketable rigs and employs more than 3,300 people worldwide.
For more information go to www.parkerdrilling.com.
 This release contains certain statements that may be deemed to be "forward-
looking statements" within the meaning of the Securities Acts. All
statements, other than statements of historical facts, that address
activities, events or developments that the Company expects, projects,
believes or anticipates will or may occur in the future, the outlook for rig
utilization and dayrates, general industry conditions including future
operating results of the Company's are forward-looking statements. Although
the Company believes that its expectations stated in this release are based on
reasonable assumptions, actual results may differ from those projected in the
forward-looking statements. For a more detailed discussion of risk factors,
please refer to the Company's reports filed with the SEC, and in particular,
the report on Form 10-K for the year ended December 31, 1999.

SOURCE Parker Drilling Company

Home

More General Interest

NEW TENGIZ PROCESSING PLANT NEARS START-UP

INDUSTRY BRIEFS

NEW TENGIZ PROCESSING PLANT

NEARS START-UP
09/17/1990
John L. Kennedy
Editor

The first of two trains of an oil and gas processing plant designed to handle high pressure
corrosive wellstreams from the Soviet Union's giant Tengiz field is scheduled for start-up
later this year.
Train two in this first plant to be built in the field is under way, and additional multitrain
plants are planned.
Tengiz, near the northeast coast of the Caspian Sea (Fig. 1), may be the largest oil field
found in the U.S.S.R. since the 1965 discovery of Samotlor in Western Siberia.
Getting Tengiz onstream will be some help in slowing the decline in Soviet oil production.
Production dropped 2.5% in 1989. And for the first 5 months of 1990, the Soviets reported a
further 5% decrease.
Many of the fields in Western Siberia where two thirds of Soviet oil is produced are in
decline and new fields are not filling the gap.
Getting Tengiz near production has not been easy. Construction of the processing plant
was delayed 2 years because of local concerns about handling high-H2S gas from the field-
H2S concentrations as high as 25%.
EXPANSION SCHEDULE
Each processing train at Tengiz 1 will handle full wellstreams from wells in the field. Each
train includes separation and stabilization; gas purification; sulfur production; and gas
liquids recovery.
Stabilized oil and dry gas will be shipped from the plant by pipeline, and sulfur and LPG will
move by rail.
Composition of the approximately 50 multiphase wellstreams that will converge at the inlet
header will vary, making estimates of feed volume difficult.
But expected annual output from Tengiz 1 plant's two trains is 3 million tons of stabilized
0.805 density oil (about 70,300 b/sd); 77 million cu m (8.1 MMcfd) of dry gas; and about
500,000 tons of sulfur.
Natural gas liquids will also be produced.
The first train was built by the consortium "LLL," made up of Lafarge Coppee Lavalin S.A.,
Litwin S.A., and Lurgi S.A. The consortium is also supervising construction of the second
train.
During a visit to the plant in late spring, the first train was 90% complete and civil work was
complete on the second train, scheduled to begin operation in the fall of 1992.
The first additional capacity from plants now in the early design stage is planned for
commissioning in 1993, according to a Soviet spokesman. They likely will be of the same
configuration as Tengiz 1.
Total workforce at the new plant-including auxiliary personnel such as instrument, electrical,
and mechanical specialists and repair teams-will near 1,500, according to a plant
spokesman. Operations manpower on each shift will likely be 40-50.
Earlier this year, Chevron signed an agreement with the Soviets to study the feasibility of
adding Tengiz field to its joint venture.
PROCESSING SCHEME
Full wellstreams will enter the plant's three stage separation system in which the first stage
will operate at about 65 bar (955 psi). The second stage separator will operate at 25 bar
(368 psi), and the third stage at 7.7 bar (113 psi). Fig. 2 is a simplified flow schematic.
The liquid hydrocarbon stream from the third stage separator is desalted before going to the
stabilizer; water from the separators goes to a sour water stripper.
The crude oil stabilizer will operate at 7.7-8.0 bar (113-118 psi) and 40-172 C.
Each train at Tengiz will have two diethanolamine (DEA) contactors. One takes gas from
the high pressure inlet separator and is designed to operate at about 64.5 bar (948 psi). The
other, operating at about 24.5 bar (360 psi), is fed by gas from the other two separation
stages.
Demethanizer, deethanizer, and depropanizer make pipeline gas, ethane, propane, and a
broad fraction product. In the beginning, ethane will be mixed with the pipeline gas,
according to a Soviet spokesman. But petrochemical plant expansions farther south at
Shevchenko will provide an outlet for ethane soon.
A Claus unit will provide 96% conversion of H2S to sulfur and the Sulfreen process is used
for gas cleanup. A 210 m flare stack is part of the sulfur recovery plant. Estimated discharge
pf SO2 to the air from the first train is 10,000 tons/year, according to a spokesman at the
plant.
Both liquid and solid sulfur can be produced, but the risk of sand or dust contamination may
prevent production of solid sulfur. A granular sulfur product may be produced in the future.
A central control room has redundant control and monitoring systems, and each unit within
the plant has its own local control. A special system monitors H2S and natural gas in the
atmosphere at critical points around the plant and can automatically shut down a given unit
if a gas leak is detected.
And the chief plant operator can shut down the entire plant from the central control room in
case of a serious emergency.
Plant vessels and piping are designed for H2S service, according to a spokesman.
Corrosion inhibitors and stationary coupons are used in the wells; data on corrosion levels
are sent from wells to the plant's central control room.
FIELD AND WELLS
Although Tengiz was discovered more than 10 years ago, no wells could be produced until
a treatment plant was onstream. Even testing was minimal until 1981 due to a lack of
equipment to handle the high H2S wellstreams.
Tengiz reserve estimates vary widely. Soviet authorities have estimated oil in place in the
140 sq km anticlinal fold at as much as 25 billion bbl, according to Chevron. Another
estimate put recoverable reserves at 6-7 billion bbl.
Chevron's recent agreement will study the feasibility of entering into a joint venture with
Tengizneftegaz to explore and produce in an 8,900 sq mile area that includes Tengiz (OGJ,
June 11, 1990, p. 18).
To date, about 40 wells have been completed. Plans are to have a total of 85 wells in the
field by 1995.
Average well depth is about 4,500 m. The deepest well to date is reported to be 5,414 m,
but deeper wells are planned and under way. Even the deepest well so far did not
encounter water, so none is expected when the wells go onstream.
Estimates of pay thickness vary, but the reservoir is at least 400 m thick, according to
Soviet engineers. Porosity of the producing layer ranges from 1 to 25% and averages 6-7%.
Permeability is only about 0.1 md; oil production is from fractures in the chalk layers.
First wells in the field were perforated and tested briefly,
then cemented because equipment wasn't available to handle the corrosive wellstreams.
Later wells were perforated, tested, and completed. Those wells are ready to be turned into
the new plant, according to a Soviet spokesman.
Early spacing was 1.4-1.5 km between wells; then spacing was decreased to 1.0-1.1 km.
Now spacing is typically 700 m between wells. Some wells were cored continuously, others
just in intervals where additional information was needed.
Up to 2 years have been required to drill some Tengiz wells.
WELL DESIGN
Tengiz completions include four casing strings (Fig. 3). Typically, a 16-in. surface string is
set to a depth of 500 m, then a 13-in. string is set to a depth of 2,500-3,200 m.
A 9 in. or 10-in. string is normally run from 3,900-4,200 m to surface and the 7-in.
production string to TD of 4,200-4,500 m.
Drilling mud weights are typically 2.1 g/cc (17.5 ppg).
A corrosion inhibitor valve is run in the tubing string which is set in a packer above the
producing interval. Inhibitor is injected down the casing/tubing annulus and into the tubing
through the inhibitor valve. Inhibitor is also injected into the flow line, and corrosion sensors
at the well are monitored at the processing plant.
The section of the tubing and the section of the production casing below the inhibitor valve
are stainless steel.
The rest of these two strings, as well as the 9 in. or 10-in. string, are 90-ksi yield strength
pipe.
Flow rates are expected to average 300-450 tons/day (2,200-3,300 b/d), according to a
spokesman in the field. Gas/oil ratio is about 500 cu m/ton (2,400 cu ft/bbl). Static wellhead
pressures are about 560-570 atm (about 8,300 psi); flowing wellhead pressures typically are
400-500 atm (5,800-7,350 psi).
In addition to corrosion, several other parameters are sensed at the well and monitored at
the central control room at the processing plant, including pressure, temperature, power
consumption, choke position, tubing and casing pressure, and inhibitor pump operation.
Spare capacity has been built into the telemetry system to accommodate other data if
necessary.
During the Journal's visit to the field earlier this year, Soviet officials were reluctant to
estimate reserves. An oil/water contact has not been located, and there is no production
history. So it may be several years before a reliable estimate can be made.
A Soviet spokesman in the field said that plans are to operate the field without repressuring
until the year 2015. A study is under way to determine what should be injected-water or
gas-after that.
If gas injection will provide the best recovery, injection would likely start when reservoir
pressure reaches about 450 atm (6,600 psi), according to the spokesman. If water injection
offers the best results, it would not be begun until reservoir pressure declines to the
saturation pressure.
Soviet engineers say the reservoir pressure is currently about 850 atm (12,500 psi) and
saturation pressure is estimated to be 250-270 atm (3,675-3,970 psi).
OTHER FIELDS
There are a number of other fields in the area around the northeastern shore of the Caspian
Sea, Several along the seashore contain very high viscosity crude-300-1,000 cp-and
require some type of thermal assistance in order to produce commercially.
These fields are from 300 to 2,000 m deep.
A study was under way earlier this year to determine how to produce these heavy oil
reservoirs.
Exploration is also being done elsewhere around the Tengiz structure in 10 or 12 different
areas.
Some wells could be more productive-and indicate larger reservoirs-than those in Tengiz,
according to a spokesman.
ACKNOWLEDGMENT
The help of Mikhail Gudyrin, Tengizneftegaz chief geologist, and Mr. Makhoshvily, Tengiz 1
plant director, in preparing this article is much appreciated; as is the help of Partec Lavalin
Inc, Also appreciated are the translation services of Borisov Igor, Albert Drubkin, and
Tamara Filippova.

Tengizchevoil LLP (TCO) has selected Fluor Corp.s joint venture team, KPJV, to execute
the front-end engineering and design for TCOs multiphase pump project in Kazakhstan.
The project will implement pump technology across the gathering infrastructure of existing
oil and gas facilities at Tengiz and Korolev fields to maintain crude oil production by
reducing wellhead pressure and increasing well deliverability.